View From Edison

We need to correct some misrepresentations made by sources in James Flanigan’s Jan. 14 news analysis [“Texas Power Suppliers Shun Bad Guy Label”].

The two most important errors of fact are: the allegations that California companies have joined the Houston companies in “gaming the ISO” and claims that the Houston companies urged California to reduce its reliance on the electricity spot market.

1. [Southern California] Edison has never “gamed the ISO.” Aside from the ethical and legal issues, it is not in our economic interest to withhold power: We are a net buyer of power at the PX and ISO and anything that drives up prices results in a financial loss for us.

[Enron Chairman Kenneth L.] Lay’s charges against our nuclear plant, the San Onofre nuclear generating station, are particularly galling. Like all nuclear power plants, our units have to be shut down periodically for refueling. We took Unit 2 offline in October 2000 and got it back online in 40 days, a record for us and below the industry average for these type of outages. Unit 3 is now down for refueling. Prior to these shutdowns, however, Units 2 and 3 established a new U.S. record for dual-unit continuous days online: 509.

2. The Houston companies and their trade associations opposed--on numerous occasions--giving Edison the authority to enter into bilateral contracts and hedging arrangements.

Concerned by the price spikes we saw during the summer of 1998, SCE requested permission in March 1999 to implement a pilot program to sign bilateral contracts. No intervener supported our effort. Some of the major interveners that opposed our proposal included the Alliance for Retail Markets, the Western Power Trading Forum (Enron, by the way, is a member of both ARM and WPTF), the Independent Energy Producers Assn., Williams Energy Marketing and Reliant Energy Power Generation.

Despite this opposition, Edison has saved more than $950 million to date through our use of bilateral contracts and hedging products.

ANDREA L. SIMPSON

Vice President

Edison International

Rosemead